SB 274: Administration of taxes: notice of deficiency assessment.

Existing law requires an individual taxpayer to notify the Franchise Tax Board of any change in the amount of gross income or deductions, as reported on the individuals federal tax return, within 6 months of the final determination, as defined, of that change, unless the change does not increase the amount of California income tax due. Existing law authorizes the Franchise Tax Board, within 2 years of the date of a final determination, to allow a credit, make a refund, or mail to the taxpayer a notice of proposed overpayment resulting from the final federal determination, as specified.

This bill would require a partnership, if any item required to be shown on a federal partnership return is changed or corrected by the Commissioner of Internal Revenue or other officer of the United States or other competent authority, and the partnership is issued an adjustment or made a federal election for alternative to payment, to report each change or correction to the Franchise Tax Board for the reviewed year within 6 months after the date of each final federal determination, as specified.

This bill would declare that it is to take effect immediately as an urgency statute.